WTO talks on textiles review stall

Major textile exporters China, Pakistan and India today stalled talks at the World Trade Organisation (WTO) on assistance for smaller textile-producing developing countries likely to be affected by the end of import quotas next January, according to diplomats.

Several developing countries have asked the WTO to review the impact of the end of the textile quota regime on smaller economies that have built up their industry around textiles.

India, supported by China and Pakistan, as well as Hong Kong, whose textile exports are expected to benefit from the international agreement to eliminate quotas in January 2005, opposed the proposal during a WTO committee meeting, according to trade sources.

The issue was expected to be discussed among WTO member states over the next two months, the sources added. "They are dragging their feet," a diplomat said. "It's clear that the Chinese and Indians would be happier if we end this procedure, while least developed countries (LDCs) and the US states will like it to continue," he added.

Several studies have shown that China stands to make huge gains in major export markets, like the US and Europe, when the agreement on textiles and clothing draws to an end.

The quotas were designed 40 years ago to cap textiles imports from individual countries and are being phased out under the binding agreement struck nine years ago.

hina currently accounts for about 28 per cent of the world clothing markets. A WTO study has indicated that Chinese clothing should snatch 50 per cent of US imports after quotas are abolished, against 16 per cent currently.

About 20 countries, including Bangladesh, Mexico, Mauritius and Tunisia, fear massive job losses amid unbridled competition from China, which was not a member of the WTO when the phase-out was agreed.